Media release – January 29th 2024
New Zealand Dryland Forests Innovation (NZDFI) is an organisation which, since 2008, has been dedicated to breeding, research and development in durable eucalypts – trees which offer real potential to diversify New Zealand’s forest industry.
In July 2022, a separate entity, New Zealand Dryland Forests IP Ltd, was set up by NZDFI‘s partners to commercialise the results of over 15 years of investment – that is, genetically improved durable eucalypt seed. The establishment of NZDFIP Ltd effectively separates commercial activities from the much broader focus of NZDFI’s research and development programme.
The Board of NZDFIP Ltd is now seeking expressions of interest from the forest industry for a limited offer sale of shares in the company and support for its ongoing research and development programme.
“After 15 years of research and breeding progress, we are ready to invite industry partners to come on board,” says Shaf van Ballekom, chair of NZDFI since its inception and General Manager of Proseed NZ, Australasia’s largest tree seed producer. “Advances in tree breeding take many decades, as does the research and education that goes with delivering what is a new opportunity for the forest industry. We are on the cusp of commercialising the results of our intensive efforts to date.”
NZDFI was established in 2008 by the Marlborough Research Centre Trust (MRCT) as a regional research and development start-up project with the support of three forest industry partners: University of Canterbury’s NZ School of Forestry (UoC); Ngāi Tahu-owned Proseed NZ (Proseed) and Vineyard Timbers Ltd – a Marlborough company.
These four current participants have made a significant investment to create this industry opportunity for large-scale deployment of genetically improved durable eucalypt germplasm. A royalty payment on sales of genetically improved plants has been introduced, with funds raised going back into research and development.
Up to 49% of the NZDFIP Ltd shareholding is on offer to forest growers that have the land, capability, and a strategy to diversify by investing in large-scale planting of the elite durable eucalypts now available. A confidential Expression Of Interest document has been circulated to a number of forestry companies that have shown interest in diversifying with durable eucalypts.
“We want to attract expressions of interests from forest growers willing to invest in becoming partners in our innovative tree breeding and research programme,” says Shaf. ‘’We plan to deliver tree breeding, research and extension services to new shareholders in a similar way to that which the Radiata Pine Breeding Company undertakes for industry. We have exciting plans for more research, and want to focus our communication and education into building the capability needed for a New Zealand durable hardwood industry.”
Expressions of Interest close on 28th March 2024 with a closed tender process to follow. If there is a successful sale process, a new NZDFIP Ltd Board could be established by 30 June 2024.
For more information contact:
Shaf van Ballekom, Chair, NZDFI shaf@proseed.co.nz 021 364 405
Paul Millen, General Manager, NZDFI p.millen@xtra.co.nz 021 662 147
See https://nzdfi.org.nz/ for more information about NZDFI’s activities.
Images are available from Paul Millen or Harriet Palmer ( harriet.e.palmer@gmail.com ) on request.
Notes for editors
Why are durable eucalypts important?
Naturally durable hardwood timber is a natural substitute for copper chrome arsenic (CCA) treated radiata pine. It has many applications – for example as posts in vineyards and orchards, and in other exterior and interior timber uses. The timber can be easily reused or recycled, meaning no hazardous waste goes to landfill as occurs with CCA-treated pine.
NZDFI has proven durable eucalypts’ potential as a high-strength material and a source of high-grade bio-chemicals. Durable eucalypts can also have very fast early growth rates and produce much denser wood than radiata pine and are very efficient at sequestering carbon. They have potential for biomass, for posts, poles and sawlogs, but alternatively can live for hundreds of years as permanent forests. The durable eucalypt species we focus on are well suited to dry conditions which will become more frequent in the face of climate change.
The benefit to New Zealand
NZDFI’s vision is for 60,000 hectares of durable eucalypts to be planted by 2050 in 12 regional wood supply catchments in northern and eastern New Zealand, creating regional hardwood industries worth up to $1 billion per annum. These are shown on the map below (Appendix 1). This is equivalent to only about 4% of New Zealand’s current exotic forest estate.
Our work aims to develop an integrated agricultural and forestry system with durable eucalypts which will support the bioeconomy and create future export market access. There are also environmental benefits such as supporting domestic emissions reduction objectives, or facilitating erosion control and drought resilience for forests and farms.
A 2020 report by Scion (New Zealand’s forestry Crown Research Institute) demonstrated that by planting one of these twelve regional wood supply catchments of 5,000 hectares over 30 years a future regional hardwood supply could generate 200 FTEs and contribute $82.5million per annum by 2050, with a return on capital employed of around 25%. If all twelve catchments were planted these would diversify New Zealand’s wood supply and generate up to $1 billion annually by the supply of 360,000 cubic metres of durable hardwood into both Australian and domestic markets as shown in Appendix 2 below.
What is our challenge?
Tree breeding and forestry research require intergenerational planning and planting decades ahead of time. Ongoing research is required to maintain progress until the product is adopted commercially. After 15 years we are on the cusp of commercialising our research.
A recent downturn in the forest industry has reduced the available forest levy funds directed to research. The next six years are critical to continuing our research and development to ensure our genetically improved seed production meets the growing demand for durable eucalypt planting.
Ultimately by bringing new partners into the NZDFI, we hope to establish a long-term wider industry commercial partnership team that can provide both new leadership and investment, which is extremely important when working in forestry timescales.